For Austrian nationals investing in a US business on an E-2 visa
E-2 Investors From Austria: Tax on the Business, the Investment and You
An E-2 move from Austria creates two US taxpayers: the company you invest in and, usually within the first year, you. This page sets out both, from official sources, and shows where residence starts.
Quick answer
Is an E-2 investor from Austria a US tax resident?
Usually yes, once living in the US for most of the year. E-2 is not an exempt-individual category under IRS Pub 519, so your days count under the substantial presence test, and a resident is taxed on worldwide income. If Austria also treats you as resident, Article 4 (Resident) of the treaty breaks the tie. Your company files its own returns: Form 1120, and Form 5472 while it is foreign-owned.
At a glance
- E-2 treaty with Austria
- In force since May 27, 1931 (State Department)
- Company
- US corporation (Form 1120) or LLC; Form 5472 while foreign-owned
- Your tax residence
- Substantial presence test; E-2 days are not excluded
- Treaty tie-breaker
- Article 4 (Resident)
- Social security agreement
- Yes, since November 1, 1991
The E-2 treaty with Austria
The E-2 route for Austria rests on a treaty that has been in force since May 27, 1931 (State Department list). According to USCIS, the investor must be a Austrian national (for this treaty), must put a substantial amount of capital at risk in a real US business, must not be running a marginal enterprise, and must hold at least 50% or operational control. There is no published minimum amount (USCIS).
Immigration questions belong with your immigration lawyer. We handle the tax side: the company, the money you put in, and your own US returns.
Structuring the E-2 business from Austria
The structure you choose in the US decides the filings, not the visa. A corporation files Form 1120 every year (IRS). An LLC follows Treas. Reg. section 301.7701-3: disregarded with one owner, a partnership with more, or a corporation if it elects (IRS). Foreign ownership adds Form 5472 and its US$25,000 penalty (IRS), and a new business set up by someone from Austria generally needs a BE-13 within 45 days (BEA rule).
Residence clarity for E-2 investors
| Question | Answer for an E-2 investor from Austria |
|---|---|
| Are E-2 days excluded? | No. E-2 is not an exempt-individual category in IRS Pub 519 |
| When do I become a US tax resident? | When you meet the substantial presence test (31 days this year, 183 weighted days over 3 years), usually in your first full year |
| The first year | Usually dual-status: nonresident before the residency starting date, resident after |
| Resident in both countries? | Article 4 (Resident) of the treaty decides; Form 8833 discloses the position |
| Social security | Agreement in force since November 1, 1991 |
Sources: IRS Pub 519, Form 8833, SSA.
Capital or loan
The money you bring from Austria can go in as capital (shares or membership interest) or as a loan to the company. For tax reporting, the difference matters: while the company is foreign-owned, loans from you, the balance outstanding and any interest are related-party transactions on Form 5472 (IRS). Keep a loan agreement and bank records for every transfer.
US withholding on payments to Austria
Timing matters. Paid to you as a nonresident living in Austria, a dividend or interest from the US company is subject to US withholding (30% by statute, lower under a treaty, IRS Pub 515); paid after you become a US resident, it is simply part of your worldwide income.
| Payment to a resident of Austria | General treaty rate (IRS Table 1) | Treaty citation |
|---|---|---|
| Dividends from a US corporation | 15% | Article 10(2) |
| Interest on a loan you made to the company | 0% | Article 11(1) |
Rates from IRS Tax Treaty Table 1 (Rev. May 2023). The IRS notes the table is not a complete guide to eligibility; the treaty's conditions, including any limitation on benefits, must be met. Once you are a US resident these rates no longer apply to you.
Ongoing US filings for an investor from Austria
- Once you are a US resident you are no longer a foreign person for Form 5472, which the IRS defines as an individual who is not a citizen or resident (IRS). Whether the company still files depends on who else owns it.
- Form 1040 on worldwide income every year you are resident, including income from Austria.
- FBAR and Form 8938 for accounts you keep in Austria; see FBAR and FATCA and Form 8938.
- Form 5471 if you keep control of a company in Austria: a US person controlling more than 50% of a foreign corporation is a Category 4 filer, with a US$10,000 penalty per year for not filing (IRS). See Form 5471.
- Funds held in Austria can be PFICs; see PFIC and Form 8621 for how the rules work.
Where the rules come from
Treaty
- The IRS lists the 1996 income tax treaty. General effective date (IRS Table 3): treaty Jan. 1, 1999 (IRS treaty documents for Austria; treaty text; IRS Table 3).
- Residence and tie-breaker: Article 4 (Resident).
- Article 7 (Business Profits), business profits.
- Article 10 (Dividends), dividends.
- Article 22 (Relief from Double Taxation), relief from double taxation.
US law and E-2 rules
- E-2 status: State Department treaty countries (E-2 with Austria in force since May 27, 1931); USCIS E-2 Treaty Investors, 8 CFR 214.2(e).
- Tax residence: Code section 7701(b) (Pub 519). Treaty residence: Treas. Reg. section 301.7701(b)-7 and Form 8833 (IRS).
- Company filings: Code section 6038A and Treas. Reg. section 1.6038A-1 for Form 5472 (IRS); Treas. Reg. section 301.7701-3 entity classification (IRS); 15 CFR 801.7 BE-13 (eCFR).
- Foreign companies you control: Form 5471 (IRS).
The tax rules of Austria on leaving or keeping assets there also apply; a local adviser covers that side.
How we help
Send us the company documents, the funding records and your travel dates. We confirm when you became a US tax resident, prepare the company and personal returns, and coordinate with your immigration lawyer where the records overlap. Gurleen Kaur, CPA licensed in British Columbia and Washington State, signs.
E-2 investors from other countries
All countries: E-2 investor tax by country. From Canada: E-2 taxation for Canadian founders. Moving without an E-2: moving to the US, by country.
Common questions
How much must an E-2 investor from Austria invest?
USCIS does not set a fixed minimum. The investment must be substantial in relation to the total cost of the business, and the lower the cost, the higher the proportion expected. The enterprise may not be marginal. Your immigration lawyer advises on this.
Does an E-2 investor from Austria pay US tax on worldwide income?
Usually yes, once resident. E-2 is not an exempt-individual category, so the substantial presence test applies, and a US resident is taxed on worldwide income from the residency starting date.
What if Austria also treats me as resident?
Article 4 (Resident) of the treaty decides residence for treaty purposes; claiming it on a US return needs Form 8833.
Does the E-2 company file Form 5472?
A US corporation that is 25% or more foreign-owned files Form 5472 with Form 1120, and a single-member LLC files it while its owner is a foreign person. Once you are a US resident you are no longer a foreign person for this purpose.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- U.S. Department of State: Treaty Countries
- USCIS: E-2 Treaty Investors
- IRS: Publication 519
- IRS: Instructions for Form 5472
- IRS: Instructions for Form 1120
- IRS: Instructions for Form 1065
- IRS: Instructions for Form 5471
- eCFR: 15 CFR 801.7 (BE-13)
- IRS: Form 8833
- SSA: U.S. International Social Security Agreements
- IRS: treaty documents for Austria
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: E-2 for Canadian founders, For immigration lawyers, Moving from Austria.
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